The detail is still being developed, so PCNs should avoid making irreversible decisions too early. However, practices can start considering one important question now: if a Single Neighbourhood Provider (SNP) Contract is offered for their neighbourhood, who should hold it?

The SNP Contract may be an evolution of PCNs, but how the contract is held will shape who carries the risk, who controls the income and who makes the decisions.

In July 2026, NHS England consulted on new contracting models for neighbourhood health services, including an SNP Contract for a defined local population, usually around 50,000 people. It expects the existing PCN footprint to form the neighbourhood in most areas and describes the model as an “evolution and strengthening” of PCNs, not their replacement. Core GMS, PMS and APMS contracts would remain unchanged. The SNP Contract would instead provide an additional locally commissioned vehicle through which wider neighbourhood services and funding could be organised. Although the final model is not settled, a single provider may take greater responsibility for coordinating delivery, funding and performance.

That makes the identity and structure of the contract holder important. It could determine who is accountable to the ICB, who controls the income, how services are allocated and where contractual and regulatory risks sit.

This article looks only at PCNs considering the SNP Contract route. The consultation also sets out other options, including a variation to the PCN DES, under which practices would continue to operate as a PCN rather than take on an SNP Contract, and arrangements under which a Multi-Neighbourhood Provider (MNP) holds the contract and subcontracts services. Those routes raise different questions and are not covered here.

1. A lead practice: One practice could hold the contract and subcontract delivery to the others. This may be administratively straightforward, but the lead practice would carry direct responsibility to the ICB. Indemnities from the other practices may reduce its exposure but would not remove it. The model could also give the lead practice considerable influence over income, service allocation and pricing unless robust governance arrangements are agreed.
2. A GP federation or existing provider: A federation may offer established infrastructure, workforce and contracting experience. However, it may represent a wider group than the practices serving the neighbourhood. Participating practices could therefore have less direct control over the contract, revenues and local delivery decisions.
3. A practice-owned company: A company owned by the participating practices (a PCN company, often referred to as ‘PCN incorporation’, although the PCN itself is not incorporated) could provide a neutral contract-holding vehicle. It could receive the contract income and subcontract services to the practices under agreed arrangements covering responsibilities, performance, pricing and risk.
   
   This is proving by some distance to be the most popular approach, and it offers clear advantages over the other models. Because the company holds the contract, it is the only entity with potential liability to the ICB. The practices, as shareholders, have limited liability, so there should be no recourse against them by the company or the ICB. And because the practices control the company, they can set out in the subcontracts exactly which services each practice will deliver, where and when, and how much each will be paid, while retaining full control of the contract and its revenues. In short, the company model avoids the imbalance of power that can arise where one practice, or a wider federation, sits in the middle.
   
   Even for PCNs that decide to continue as a PCN rather than pursue the SNP route, a PCN company can still be hugely valuable, offering limited liability and a vehicle to employ PCN staff, so that employment risk sits with the company rather than with individual practices.

Already have a PCN company?

If your PCN already has a PCN company, it may well be the natural vehicle to hold the SNP Contract. PCN companies are designed to be flexible, and where they reflect the PCN’s existing decision-making and surplus-distribution principles, they can be adapted to take on a contract of this kind. It is worth reviewing the company’s articles, shareholder arrangements and subcontracting documents now, to make sure they will work for the level of income, subcontracts and obligations an SNP Contract may bring.

Regulatory considerations

A contract-holding company would not necessarily require its own CQC registration. The answer will depend on the services, the subcontracting arrangements, who is actually employed by the company and which organisation has responsibility for and ongoing control of regulated activities. Where the services are subcontracted to and delivered by the practices, registration is less likely to be needed, but if the company itself employs clinicians to carry out regulated activities on its behalf, it could be required. NHS Pension Scheme access will similarly depend on the employment and delivery model. Employment, VAT, information governance, clinical governance and insurance should also be considered before the structure is finalised.

What should PCNs consider now?

• Footprint: Will the neighbourhood match the existing PCN?
• Contract holder: Which entity should hold the contract, and is an existing PCN company ready to do so?
• Control: Who should decide service allocation, pricing and performance?
• Economics: How should income, costs and any surplus be shared?
• Liability: Where should contractual, clinical and regulatory risks sit?
• Structure: Does the existing PCN company’s governance need updating, or does the PCN need to set up a PCN company?
• Documentation: What changes will be needed to governance documents and service subcontracts?

Prepare now, decide when the detail is clearer

PCNs do not need to restructure immediately, but they should understand their options before an ICB begins commissioning services. Once the final model is available, there may be limited time to agree ownership, governance, subcontracting, income allocation and risk-sharing arrangements. Setting up or changing a PCN company will usually need the agreement of every practice, so it only takes one practice not feeling the urgency for progress to stall.

How DR Solicitors can help

DR Solicitors advises PCNs and GP practices on PCN companies, governance, contracting and regulatory structures. Contact our specialist primary care team here to review whether your existing arrangements are ready for the proposed SNP Contract.

By Sarah Cook and Nigel Kotani

Sources and Status

This article reflects NHS England’s proposals published on 16 July 2026, which remain subject to consultation and further development. Sources: NHS England, “A consultation on proposed MNP and SNP contracting models – high level summary”; and “Questions and answers: aimed to help further clarify the proposals”.